“Charging a flat monthly fee means that we will offer players the game we set out to make, and the one that fans want to play,” Firor told the website. ESO will also include 30 days of play with the purchase of the game. “Going with any other model meant that we would have to make sacrifices and changes we weren’t willing to make.”

Here’s what charging a flat monthly fee actually means:

Fewer players will try your game.

The majority of those players will pay more money than they otherwise would have.

Perversely, you’ll still end up making significantly less revenue.

Also, the subscription model will put pressure on players to leave the game as soon as they feel like they are ‘done’ with the game.

The last is perhaps the sneakiest problem with the subscription model. First off, it sets off a desperate need to maintain subscriptions at all costs, which means doing sneaky things that hurt the game experience to keep players logging in one more day (remember housing maintenance in UO?) Secondly, there’s a very real and tangible problem around the launch windows of MMOs. As different players stagger to the endgame content at different rates, they’ll discover there’s not enough other people there to do the content. At that point, they have to make a choice – wait for guildmates to become raid-capable, or go back to their old home. Since at this point, they have no idea if your endgame content is even any good, the gravity right now is to go back to the old MMO they already know and love.

In a free-to-play game, there’s a lot of bounce back. We don’t care if a free-to-play player wanders off because he’s finished all of the content that’s available for him to do. We don’t have to act like a jealous girlfriend because he’s wandered off to play other games. We just have to put out content that’s good enough for him to actually want to ‘bounce back’. Which is to say, its a much kinder business model for a games universe where players have a million low-cost gaming alternatives. Including, I note, a whole bunch of other F2P MMOs.

With free-to-play, because you’re selling these items, you’ll have months where you sell a bunch of stuff and you make a lot of money in that one month. But it’s all about what happens during that month. Next month, the person who maybe bought $100 worth of items in the last month could purchase nothing at all. You don’t know what you’re going to be getting, and because you don’t know what you’re going to be getting, you can’t plan ahead. You don’t know how much money is coming in. If you can’t plan ahead, then you can’t keep staff, because you don’t know if you’ll have enough money to pay the staff next month.

I don’t know. Somehow, League of Legends has managed to solve that problem. I suspect it’s because free-to-play has earned them a swimming pool full of money.

Look, is F2P more difficult to predict? Sure. On SWTOR, for example, we’ve missed our predictions significantly every month — we keep guessing too low! This isn’t a case of us being bad at it, it’s a case of us being ultra-conservative on these guesses. It turns out that once you actually have data on buying behavior, its not that hard to figure out what people will spend for next month, based on what you’re releasing. Some months will be lighter – and then some months we sell Ewoks.

We hear a lot of people saying, “Star Wars is free-to-play now, it’s great!” But then you ask them if they’re playing free-to-play Star Wars and they say, “No, not really playing it.” Everyone talks about how great it is that it went free-to-play, but then you ask around and really, there aren’t that many people who are playing it since it’s gone free-to-play

Look, I’m not saying that SWTOR’s F2P plan is perfect, or that there isn’t another billing model out there that’s even BETTER for the consumer. I will say, though, that when Blizzard, the industry leaders of the subscription-based genre are unwilling to release any other information about their next game other than there’s no way it will be a subscription-based MMO, maybe it bears some thought as to whether they know something you don’t.

5 Comments

We all agreed, every time it came up, that your game was the last game that would ever succeed with a subscription model. We were off by one game.

(That FFXIV quote screams ‘I don’t understand how business works’, since you could easily say the same thing about, for instance, a retail store. ‘You can’t predict how many people will buy Thneeds this month! How can we keep our floor staff if we can’t predict Thneed sales?!’ I don’t think the director of an MMO needs to be an MBA, but he should probably have an MBA on-hand to field business model questions.)

Obviously I can’t give actual numbers, but I can definitely say that while I was at ArenaNet, Guild Wars 2 was also doing just fine. Like… really, really fine. I think the pure subscription model is dead, even if some companies aren’t willing to concede yet.

[note: sorry, but this turned out to be more like a blog post of my own than a comment…]

“players have a million low-cost gaming alternatives”

this.

the largest hurdle in getting players for your game is the over-abundance of choice. the number of digital bits that can get churned out is growing exponentially larger than the actual number of playtime hours available to the world’s population.

meaning, the leisure-time options are growing like wildfire, but the amount of leisure time folks have to consume said options is stagnant.

the official term for this is “attention economics”. (btw, kevin kelly is one of my heroes) the relevant scarcity becomes player attention rather than consumable items.

this means, you need to optimize for this environment.

1) you need to be extremely accessible. free-to-play and a smooth, fast, get-to-the-game-and-not-wait-for-downloads nux. (new user experience) this doesn’t mean you can’t have later depth, of course.

2) speaking of depth, the game needs to be sticky. you need to see the depth (but not be inhibited by it) very early on in the nux. for an mmo, the free-to-play aspect helps here as you are less likely to get an ’empty world’ issue.

3) there needs to be a smooth re-engagement path. your game will need to compensate for folks re-joining. this means, you will need a way for them to make up for lost time. the easiest way to do that? buying time-spent — xp pots is probably the least creative way you can do this, but it works.

4) most importantly, you need to realize that free players are not debits, they’re credits. as an mmo guy, i don’t need to point out the benefits of having players online and what that does to the network effect of your game.

it’s corny and over the top, but (as an expert in the field, i can say) the nuggets are sound. you will need to de-social-game-ify them and apply the theories to an mmo situation, but, again, it should act as a creativity springboard for options going forward.

just make sure whenever you read something like “have an expensive item” don’t think of the vocal outrage from “horse armor”, think of the measured, data-driven effect it had on actual engagement (neutral to positive) and the effect it had on revenue. (very positive) you know enough not to listen to what people say, but trust the measurements stemming from what they do.

alrighty, i’ve only touched on bits and pieces here and there, but there’s only so much time in the day and i could write forever on this topic. heh, just ask raph.

LoL is just as much an anomoly as WoW is for subscriptions in many ways. The perfected a game, updates, and cash shop for their audience

For the Tor article.. that’s double what it was at the lowest point, which would be considerably less the what is was during the firs quarter and Maybe even further. It also had many fators which lead to that transition as well.

Going by the GW2 recent earnings report it doesn’t seem as profitable as i thought either.

Secondly free to play games have failed as well and it seems their failure rate is much quicker than a sub that later transforms to a ftp model

I’m not advocating that one model is better than others, it is extremely variable and depends on the game and audience. Subs are definitely not as popular anymore, and unlikely to gain the same money as they used to but to say, financially that one model is better than others is misleading at this stage

I think some company needs to come up with a better F2P model. One that lets you spend a reasonable amount on the things you value, without being pay-to-win, and without being intrusive.

I don’t think the $15/month is really going to discourage anyone who plays the game a lot; it’s just not that much money. However, I think part of the problem with subscriptions is that you have to cancel them (no one likes being auto-billed if you don’t remember to cancel – especially if you’re paying for 6 months at a time).

The integration of in-game purchases for F2P games is immersion-breaking. Sure, players get used to it, and it can be done so that it’s not horrible, but I can certainly understand not wanting to go that route.

Personally, I think LotRO’s lifetime subscription (for $200-$300) was great. Not too much money (if you played the game for long enough). It’s F2P now, but they give lifetime accounts 500 points per month to buy stuff with. I have 2 lifetime accounts, and I still spend money on other stuff. I do find the in-game store too intrusive though, but some of their recent changes (such as Lalia’s in-game shop) have made it better.